However, first of all, lets put what we are about to analyse into context. In order to make the point that government debt is not historically high, several bloggers have been displaying the following chart (for example here):

Its easy to look at this and conclude (as many have done) that actually public debt is fairly minuscule compared to how indebted the country was following the accumulated debt of having fought two world wars. However the problem with this chart is that it represents public debt as a percentage of GDP at the time. As current GDP is approximately four times larger, it is illuminating to view the same figures adjusted for inflation:

This is chart uses exactly the same dataset but with the figures adjusted to represent the real value in 2005 pounds -- and shows very clearly our current national debt is virtually as high in real terms as it was following the devastation wrought on the UK's finances of having fought two world wars. Clearly this is not a good position to be in -- however the common fallacy on seeing this graph is to mistakenly assume that the 2010 peak is a summit like the peak around 1946, and that the 'cuts' which the coalition government are about to implement will see this debt falling rapidly from here on in. Unfortunately, as we will see, that is not the case. The point on the chart with which we should be comparing our current level of indebtedness is in fact around 1940 as, despite the apparent "ferocious cuts", public debt is set to double between now and 2016.

Don't believe me? Lets take a look at the figures.

Here is how much the current coalition government is actual planning to spend each year from now until 2016. (Just in case you don't believe government figures, all the data I am using from here on in comes from this report (pdf) from the quasi-independent Office for Budget Responsibility. In every case, the figures for '08-'09 are actual, those for '09-'10 are estimates, and those thereafter are OBR forecasts).

click to enlarge

So despite the rhetoric of "eye-watering" and "blood-curdling" cuts, the reality is that in nominal terms government spending is actually set to rise each year until 2016. So where are the cuts? Well, these figures are not adjusted for inflation, so in real terms spend is actually going to be remaining pretty static -- but that is still not a cut. Lets look a little closer at these spend figures:

click to enlarge

These are exactly the same spend figures but now broken down to show how much is current expenditure and how much is capital expenditure. Current expenditure represents the day to day costs of running government services and includes things like civil service salaries. Capital expenditure represents the costs of buying fixed assets, like schools or hospitals for instance. Now we can see that planned capital expenditure is being reduced year on year, in order to protect current expenditure -- in other words the government is planning to reduce spend on building things in order to protect public sector jobs. I think we can all agree that protecting front line services and jobs should be the government's first priority - and this appears to be what the coalition is trying to do.

I said earlier that public debt is actually set to double from current levels by 2016 -- why is this? Well, lets compare the above government spend with forecasted receipts (i.e. total government income from taxes, etc) over the same period:

click to enlarge

The blue bars represent the same government spend figures we looked at above, the green bar shows how much revenue the government expects to receive each year over the same period. As you can see there is a considerable gap between spend and receipt -- i.e. the deficit -- all of which needs to be covered by government borrowing. Why is there such a large gap between income and spend? There are several reasons:

decreased tax income due to companies make less profit, wages being depressed, and more people being unemployed;

increased social security payments to cover the greater numbers of unemployed;

increased interest payments as government debt increases;

the fact that the size of the state has anyway been artificially increased over time beyond the public's willingness to pay for it through taxes (in fact the last time receipts exceeded spend was in 2001, every year since then the government has spent more than it earned).

So what about the costs of bailing out the banks? Indeed just yesterday another blog shortlisted for the "best welsh political blog" category, Everyone's Favourite Comrade, wrote this:

"The only reason that we have a deficit is because all the money was given to the banks"

This, I'm sorry to say, is complete nonsense. The cost of re capitalising the failed British banks came to £117bn and those costs were spread out over the years 2007-09. There is no subsidy to banks included in the current deficit, and indeed Gordon Brown was running a deficit long before the Northern Rock debacle in 2007.

Anyway, here's the forecasted borrowing figures (i.e. deficit) between now and 2016:

click to enlarge

Of course another way of describing the deficit is as the rate at which national debt grows each year -- accordingly lets take a look at what effect this deficit will have on Government debt (and bear in mind that the £771bn figure is the 2010 'peak' in the second chart above):

click to enlarge

So as you can see, even at this pace of 'cuts', government debt will effectively double to £1.3 trillion by the end of the parliament. And remember the government doesn't really have debt -- it is actually our public debt, which we (and our children, and our children's children) will have to pay back. And indeed we are already paying it back -- take a look at the amount the government is forecasted to spend on interest alone as the total debt spirals upwards:

click to enlarge

Yes, thats right, interest payments are going to double too. The figures involved here are so huge it might be difficult to understand them unless we put them in context. Accordingly I have added the amount the government will spend on debt interest this year, and the amount it is forecasted to spend in 2016, into a chart of departmental spending for 2010-11:

click to enlarge

So as you can see, current debt interest is the fourth largest single government expenditure -- more than we spend on defence, police spending, the environment, and twice what we currently spend on transport. By 2016 however, debt interest will have risen to be almost half of what we spend on the NHS! What a tragic waste of money. I can only wholeheartedly agree with Lord Myners, Gordon Brown's City Minister, when he said:

"There is nothing progressive about a government that consistently spends more than it can raise in taxation and certainly nothing progressive that endows generations to come with the liabilities incurred in respect to the current generation."

If only he had said so when he was still in Government.

Anyway moving on, what of the arguments put forward by various Labour (and Plaid) politicians that you "can't cut your way to growth", implying that it is illogical to reduce government spending at a time of limited demand as that will only exacerbate the situation? Well this is what a favourite of this blog, Nouriel Roubini, the professor of economics of NYU, had to say about the cuts versus stimulus debate:

"The policy dilemma is that you are damned if you do and damned if you don't. You have large budget deficits, there has been a large monetisation of these deficits, near zero rates, Quantitative Easing [Ed: printing money to you and me]. On one side if you exit too soon in terms of fiscal stimulus and the recovery is still too weak there is a risk that you fall back into recession and deflation. On the other side, if you don't want to make that mistake, you say "no, lets maintain this stimulus", then deficits and debt are becoming already large - 10% of GDP deficits in most advanced economies, public debt rising towards 100% plus in the next few years, therefore either you have a fiscal trainwreck down the line, or you monetise these debts and eventually youre going to have high inflation and high loan rates are going to begin and crowd out the recovery. So its an extremely delicate trade off in this debate between growth now and fiscal and monetary austerity now."

As he says, its a very delicate trade-off with huge potential pitfalls on both side of the argument. Do you risk borrowing more to stimulate the economy and end up with large increases in debt and interest payments plus probably runaway inflation, or do you start to cut too early and plunge the economy into a double-dip recession and deflation? My own personal opinion based on all the evidence is this:

Even at the coalition's proposed rate of slowed down public sector spending, the national debt is set to double to £1.3 trillion. This already means that in five years time our public debt in real terms will dwarf the debt the country ran up in fighting two world wars. If the country was to borrow even more now to attempt to stimulate the economy what will be the resultant debt? What will be the annual interest payments on maintaing those levels of debt? How many generations will it take to pay it off?

If we were to continue to spend, how much would the government realistically need to spend to adequately stimulate the economy into growing? This is an important question as there is no point in increasing borrowing for no outcome. The US last year implemented a stimulus package worth $800bn -- the equivalent of almost 5% of their $15 trillion GDP -- yet the returns have been meagre, so much so that Obama is now discussing implementing a second stimulus. Are we sure that we want to go down this path with no guarantee of returns?

What is likely to happen if we decide not to stimulate and also not to reduce public spending? In this case the likely result is that there will have to be either higher taxes and/or higher interest rates, which will lead to a new round of private sector job losses -- i.e. further turmoil in the wealth generating sector of the economy.

In addition if we continue to spend without any credible plan to pay back our debt, then we are likely to lose our AAA debt rating with untold consequences in terms of debt interest repayments.

Finally it is by no means certain that there are no more structural economic shocks in the pipeline - therefore it is certainly prudent to attempt to get our financial situation into better shape now in anticipation of further economic troubles.

Accordingly, on balance, I'm afraid that there appears to me to be little realistic alternative paths to that currently being adopted by the coalition government.

UPDATE: Certain commenters have asked me to clarify how the UK compares to other international governments in terms of accrued debt. I am happy to oblige. Here are the OECD's figures for total government debt as a percentage of GDP for the most recent year available, 2009:

click to enlarge (Japan figure for 2008)

And to demonstrate the trajectory of growth of debt, based on the same OECD figures, the following chart illustrates how much debt has increased over the five year period of 2004-2009:

UPDATE 2: As luck would have it, the Economist published just yesterday the below chart comparing the budget deficits of various countries as a percentage of GDP:

So to recap these international comparisons: the UK is running the second highest budget deficit behind Ireland, the UK's debt has grown faster over the past five years than any other country bar Iceland, and the size of our debt is nudging towards that of Italy and Japan. I'm afraid I would find it difficult to argue against a period of prudence if we want to avoid a much more serious economic trainwreck down the line.

Uber-Blairite journalist John Rentoul writes about Ed Miliband's speech in the Independent:

"The weakest line in the speech was the response to being called Red Ed. “Let’s have a grown-up debate,” he said. All right, what about his policy of a living wage? How do the economics of that contradict the idea that his instincts are of the unrealistic left? Who is going to pay for something much higher than the minimum wage at a time of recession and a public spending squeeze? How is he going to get people off benefits by encouraging employers to pay higher wages to the marginally employable?

Elan Closs Stephens, the chair of the Anglesey Recovery Board, has used the occasion of the first anniversary of its formation to write to all IoACC councillors to set out the Board's assessment of progress to date. Here are the key passages and my comments:

"Since last summer the Council has made some real progress, particularly in reforming its political structures, tackling instances of poor member behaviour and improving public engagement."

This statement is interesting in many ways. In mentioning progress on tackling "instances of poor member behaviour" it shows that the Board, despite previous claims to be neutral on the issue, tacitly approves of the expulsion of various councillors from the then Original Independents. The comment referring to progress in "reforming its political structures" is puzzling. Political structures must refer to the various political groupings within the council, and possibly to the fact that they have now produced 'statements of aims and values' as they were required to do by the Board. However, as I noted yesterday, there is little point in them doing this unless they then make them publicly available -- something all of them apart from Llais i Fôn have avoided doing despite numerous requests from this blog.

"We have seen some tangible benefits of this in practice, and of members contributing fully and effectively to the business of the council and the challenges that the island faces"

The significance of this statement of course is that it implies previously councillors (total salary & expenses: £760,935) were not engaging with the challenges the island faces...

"However, we believe that recovery remains fragile and that we cannot say it is completely sustainable for the future."

So clearly not all good news then. And theres more, much more:

"[The Recovery Board] were less convinced that members fully appreciated the general and strategic purpose of their role as Councillor. It is this corporate and strategic role that will have to be developed as Anglesey faces the challenge of one of the worst recessions in living memory."

This is also a strange statement insomuch that it implies that many councillors either don't realise or don't appreciate that is they as elected representatives of their ward constituents who are supposed to be setting the strategic direction of the council -- not the officers. As it has been known for some time that there has been tension between councillors and officers at IoACC, this might suggest the reason why. It might also reveal the reason why councillors and non-party groupings have not thought it necessary to produce manifestos until now...

"We have seen the Wales Audit Office draft Corporate Assessment report ... it identifies that the detrimental personality issues that were identified by the Auditor General for Wales last year still persist, if to a lesser extent. It sees only limited progress in strategic policy-making and in the management of human and financial resources, and continuing weaknesses in public accountability"

So after one year of the Recovery Board and numerous direct warnings from Carl Sargeant that the Council is in the 'last chance saloon', some councillors still thinks its a good idea to play personality politics. Regarding "limited progress in strategic policy-making" see my previous comment. I guess we will learn just how much the various groupings at the council have learned when we see how they engage with the Rhosneigr by-election.

"Overall, we agree with the WAO the progress towards recovery has been patchy and would probably not have been achieved without pressure from the Minister through his Board and the MD over the past year. This must be a strong concern given the severe challenges that Anglesey faces in the months and years ahead."

'Strong concern' is putting it mildly.

"I hope you will have recognised by now that the Board is on your side as you move towards recovery. We do not want to say that we have helped recover the Council. The Board wants to say that the Council has recovered itself."

Tuesday, 28 September 2010

Ed Miliband in his conference speech today said that the war in Iraq was "wrong". All the media analysis of this part of his speech has centred on the strategic re-positioning implications for Labour of this admission (and of course on the rift this exposed with his elder brother who was captured on camera asking Harriet Harman why she was clapping when she had voted for the war).

However my opinion is that all this talk of "trying to strategically reach out to those who left the Party because they opposed the war" is both trivialising the issue and dramatically missing the point when we think of the human consequences of the conflict. I wonder how the families of soldiers who lost lives or limbs in Iraq will feel about the leader of the Labour Party now essentially saying that those sacrifices were for nothing.

It strikes me that this is an opportune moment to remind anybody who is considering standing in the Rhosneigr by-election of the following passages from the People's Manifesto for Ynys Môn:

One of the major reasons why Anglesey County Council is dysfunctional is because our councillors lack both a shared vision for the Island and a policy roadmap of how to get there. This is in large part due to a significant number of Independents who are elected without issuing to voters in their wards either individual or group manifestos, i.e. a statement of where they stand on various issues and what they should like to do if elected. Such a situation is intolerable because:

- Voters are denied the opportunity to vote on a political vision and set of policies – instead they must try to make their decision based only on the personalities of the candidates. However when you consider that the current average councillor to elector ratio on Anglesey is 1:1,270 people, it is laughable to think that each of those 1,270 voters are able to make an informed decision on the personalities of each of the candidates. Furthermore this situation will worsen at the next council elections when, following Local Government Boundary Commissions changes, the number of councillors will be reduced from 40 to 36, and the councillor to elector ratio will increase to an average of 1:1,411 people.

- Independents, once elected, are effectively accountable to nobody but themselves and are certainly not constrained by any kind of group manifesto or ‘party discipline’. As a result they are free to behave pretty much as they please – leading to the myriad problems of ill discipline we are currently witnessing at the council.

- Independents do attach themselves to a number of opaque groupings (the Original Independents, the Menai Group, Anglesey Forward, and, recently, Llais i Fôn), however these groupings also fail to (i) produce or publicise their aims or policies; and (ii) often fail to impose any form of ‘party discipline’. As such they are better regarded as ‘factions’ not ‘parties’.

- As voters do not know in detail what they are voting for, it is impossible for them to then evaluate their councillor’s performance when the next council elections come around.

Following a similar analysis by the Anglesey Recovery Board, the WAG Minister for Local Government has required that all Anglesey non-party independent groupings produce a "statement of their aims and values" no later than May this year. However as of now only one group -- Clive McGregor's Llais i Fôn -- has unconditionally made their statement public following requests from this blog (for which they deserve great praise). I have emailed the Original Independents, Anglesey Forward and the Menai Group asking them to also send me their Statements but have been met with either silence, or a request for my name and postal address. As we are now four months past the deadline set by WAG all groups must surely have completed their Statements, yet for whatever reason do not wish to publicise them -- which surely defeats the object of producing them in the first place. How can Anglesey residents vote for you if they don't know what on earth you stand for?

Accordingly, for all those thinking of standing in Rhosneigr (and the groupings which may be backing them), I would like to re-iterate this section of the People's Manifesto which deals with local elections:

- All Parties and Political Groupings must publish an updated and Anglesey-specific manifesto of their aims and values at least two months prior to local elections. To save costs these can be hosted on the Anglesey County Council website.

- All Independent candidates standing to become County Councillors in Local Elections must either:

(a) state which Political Grouping they intend to join if elected; or

(b) publish a personal manifesto of their aims and values at least two months prior to local elections.

If we are ever to break with the problems which have bedevilled the council for too long then candidates to become county councillors have to start becoming more open and more transparent about their intentions should they be elected. Therefore I appeal to all Rhosneigr candidates to let us know either know which group they intend to join if elected, or to produce a manifesto of their aims and values which can be distributed among the 748 ward residents. Let's all make Rhosneigr the turning point.

------------------------------------------A SIDE-NOTE: I found out yesterday that this blog has been shortlisted amongst four others in the politics section of the inaugural Wales Blog Awards. The winner will apparently be announced at a ceremony in Cardiff on the 14th October. I know many of you come to read the comments rather than my well researched and finely argued postings ramblings, but nevertheless I thank you all for helping making this blog the force it is!

Monday, 27 September 2010

Considering that today was the day that the Adjudication Panel for Wales met behind closed doors to discuss ex-Anglesey Council Leader Phil Fowlie's case (having refused to postpone the case to allow him to attend personally following his recent heart operation) it probably wasn't the ideal day for Anglesey Council to post the election notice for his replacement as councillor of Rhosneigr:Notice of Rhosneigr Election1

Nevertheless the by-election will now take place on 18th November. Following all the dramatic changes at Anglesey Council since the last local elections, it will be interesting to see which of the Council groupings will be successful in Rhosneigr. We may also finally get to see the Manifestos of groupings other than just Llais i Fôn...

It seems that David Miliband was overwhelmingly the preferred choice of North Wales activists, beating his younger brother by 44 percent to 30 percent. In total only three North Wales constituencies favoured Ed over David, curiously all in the North West: Arfon, Dwyfor Merionydd, and Ynys Môn, perhaps indicating a more radical, left-leaning Labour base in our part of Wales.

And as an added bonus, here's how our MP, Albert Owen, ranked his preferred candidates for the leadership:

Sunday, 26 September 2010

So Gordon Brown-loyalist Ed Miliband -- and the man backed by Anglesey MP Albert Owen (another Brown loyalist) -- has become Leader of the Labour Party. As the media begins asking what Ed's leadership could mean for the Labour Party and for the country at large, Its a good time for us to ask ourselves this question: what has Ed Miliband ever done for Ynys Môn?

The answer, despite having only been in Parliament for five years, is quite a lot -- but little of it positive.

Ed's only position of note within government during his short career was as Secretary of State for Energy and Climate Change, a position he was appointed to in October 2008. Just two weeks into that role he suddenly announced that the Government's then target of reducing greenhouse-gas emissions by 60 percent by 2050 was not ambitious enough and promptly upped it to 80 percent -- one of the highest such targets in the world. At the time this move was welcomed by climate scientists and various green pressure groups, and, who knows, over time it may be be proven to have been the correct decision -- but the fact is that it also had important knock-on effects for British industry which were not so widely trumpeted by the Labour Party. Emissions targets such as this, and the carbon-trading scheme implemented by the EU to help implement them, have effectively made it all but impossible for Europe-based primary metallurgical industries -- such as Anglesey Aluminium -- to remain competitive with similar companies operating in Russia, China, or India. A target of 80 percent reductions in emissions indicated that energy prices would almost certainly rise in the future -- not good news for an energy-hungry company such as Anglesey Aluminium which daily consumed 20 percent of the entire electricity supply in Wales. Ed Miliband had effectively put AAM on notice, and when just three months later the Nuclear Decommissioning Agency informed AAM that the cheap electricity deal on which it depended with the now publicly-owned Wylfa power station would have to be scrapped because of EU legislation preventing government subsidising private companies, there could be no other outcome but the closure of Anglesey Aluminium. Unsurprisingly Anglesey Aluminium was not the only such primary metallurgical company to be forced to close at the same time: the Corus Steelworks in Redcar also folded for almost exactly the same reasons.

One thing however we can half-thank Ed Miliband for is that in setting such an extraordinarily high emissions-cut target, he finally woke himself -- and the Labour party -- to the energy black hole the UK was sleepwalking towards. The fact is most nuclear plants and half of the UK's conventional coal plants are scheduled for closure over the next decade and the Labour Party, whilst in government, had completely taken their eye off the problem -- leading to even Ed Miliband's own department predicting possible energy blackouts by 2015. From this point of view it is illuminating to note that when Ed Miliband was appointed two years ago as the Secretary for State for Energy and Climate Change -- this was the first time in 13 years of Labour rule that there had actually been a full Minister in charge of energy policy. Before then the energy portfolio had been just one minor part of the sprawling Department for Trade and Industry's remit. Furthermore the average tenure of DTI Secretaries of State was just a year and a half meaning that there was little continuity or foresightedness at the top of the department.

No wonder therefore we are currently in the position we are now in Anglesey: hoping against hope for a massive £7 billion investment to build Wylfa B immediately following the largest recession since the 1930s, with a UK government facing the highest ever peacetime levels of public debt, and seemingly entirely at the mercy of internal German politics (see here). Had Labour taken action much earlier during the boom years Wylfa B could have already been in place and the Island's largest private-sector employer, Anglesey Aluminium, may well still have been operating. So, thanks for nothing, Ed.UPDATE: Just in case you were wondering, this is how Labour Party members in Ynys Môn voted in the leadership contest:

click to enlarge

Good to see such overwhelming support for Ed Miliband despite his sterling work in contributing to making Anglesey's largest private-sector employer unviable.

Saturday, 25 September 2010

Whatever the rights or wrongs of the case against former Anglesey Council Leader Phil Fowlie, it seems to me entirely wrong that the Ombudsman tribunal against him will go ahead just days after he has undergone serious heart surgery for the second time. According to the Daily Post the Adjudication Panel for Wales will proceed to hear the case on Monday (27 September) and rely on written submissions only. Of course the case needs to be heard, but I see no good reason why it couldn't be postponed on compassionate grounds until a later date -- Fowlie is anyway no longer a councillor and its not as if the Ombudsman doesn't have any other cases to consider...

As Councillor Bryan Owen quite rightly says, "Phil deserved the chance to be there to represent himself".

Friday, 24 September 2010

What percent of the total number of police officers do you think are available to patrol Holyhead, Llangefni or Amlwch's streets at half past midnight on a Friday night?

20 percent? 15 percent? 10 percent?

Combined percentage of officers and PCSOs

visibly available to the public at different times in two sample forces

click to enlarge

Well, according to a report (pdf) just released by Her Majesty's Inspectorate of Constabularies (HMIC), the actual amount is likely to be just 6.4 percent. According to the above diagram from the report approximately half of all police officers are anyway deployed away from the "front line" on other matters (e.g. investigation, intelligence, and various bureaucratic functions), 42 percent just aren't rostered for duty at night, and of those who are 2 percent are off sick, on holiday or on restricted duties -- leaving just 6 percent to man the 'thin blue line' on our streets. Strangely almost double that number (11.3%) are available at the rather less crime-filled time of 9am on a Monday morning...

The report also goes on to explain why so much police are now deployed away from the front line:

"In seeking to reduce every risk to the public and possibility of error, all police officers’ work has increasingly become controlled by rules of good practice or guidance. In 2009 alone 2,600 pages of guidance were issued to officers setting out how their work should be done; and there are now 100 processes in the criminal justice system, requiring 40 interventions by police officers, staff and specialists. The cost to policing is estimated at £2.2 billion per year. The effect has been to draw resources into investigation, intelligence and other specialist functions, and away from the public: the number of warranted officers working in these areas increased by 3,000 over the last four years, while the number working in the community declined by 1,400."

To illustrate this point the report helpfully includes another diagram demonstrating just how much 'guidance' the average police force receives annually from the policing quango, the National Police Improvement Agency (NPIA):

Apparently in just 2009 alone there were 52 guidance documents produced by both the NPIA and ACPO (Association of Chief Police Officers) comprising more than 2,600 pages and over 250 recommendations. All of this just goes to show that the current model of policing were priorities are set centrally from Whitehall and require endless police paperwork and box-ticking is drawing ever larger numbers of Police Officers from the front line where we need them. As I have already written, the North Wales Police Authority is in favour of the status quo -- I say it's time to try something different.

UPDATE: A commenter writes "I read somewhere as well that we have never had such a high ratio of Police to general Public. If that is true, why are tey unable to attend burglaries etc, and try not to attend car break-ins at all." You are right, the below chart from the same report, shows that we do currently have record numbers of Police and PCSOs:

Click to enlarge

There has been a 50% increase in police officers over the past 40 years, and a fourfold increase in other staff, including PCSOs. Yet, ironically, more and more police are being re-deployed away from frontline services.

Thursday, 23 September 2010

Commenter 'Jarlath' makes the case for Wylfa B and Nuclear power in general:

"Then there are the cries that [nuclear power is] not safe, with reference to accidents in the past, a bit like saying I wont fly today because a plane crashed in the sixties, or that I will not buy a car because an old Lada is so unsafe."

"According to information disclosed under the Freedom of Information Act, Anthony Snow was paid £107,580 in compensation when he left his job in September 2009 and the WAO will also have to pay more than £618,000 of his pension contributions until he turns 60."

This comes to a total of more than £750,000 -- yet farcially Mr Snow found himself another well-remunerated public sector job as COO of the Financial Reporting Council quango just six weeks later. Lets put these numbers into context: in this example just one Welsh public servant has received a pay-off amounting to almost half of the putative £2million cuts to the S4C which are currently causing such a fuss. And lets not forget that this is not an isolated incident: remember the hundreds of Welsh NHS executives who had their £50K plus salaries protected for ten years (!) following the reorganisation of the service which cut local health boards down from 32 to just seven?

And yet, despite all this, we are asked to believe by Labour and Plaid Cymru in the Assembly that the Welsh public sector is so unimprovably productive that any budget cuts at all will affect front line services. I'm afraid as just these two examples show, the lack of any competitive or downwards pressure on public sector budgets just leads to an otherworldly profligacy -- especially with regards to top-end public sector salaries. We need look no further than David Bowles' £1,000-a-day pay deal at Anglesey Council to know that this is true.

Only by applying some direct accountability for results in the setting of public sector yearly budget rises can these kind of excesses be avoided in the future. This is one of the reasons why I am a supporter of the coalition proposal to elect police commissioners, as one of the main planks of this policy also includes the need for any rises to the police precept element of council tax to be approved in a local referendum. The Police will be free to explain why they think they need more tax money, and the public will be free to accept the rise or not. In fact I would be happy to see this policy extended to include council tax rises as a whole, whereby local authorities would have to make their case in a local referendum. Based on the council's record and future plans, local residents can then decide what level of settlement they feel is fitting.

Imagine how much more engaged Ynys Môn residents would be with local politics and with the actions of councillors if we had the opportunity to hold Anglesey Council to account in this way. Imagine how much better services the council would need to provide in order to justify a rise in their budgets...

Wednesday, 22 September 2010

Yesterday's Times newspaper reported that Horizon, the joint venture between E.On and RWE npower -- and the company which is planning to build Wylfa B, has urgently contacted Energy Secretary Chris Huhne to seek clarification over remarks he made last week which seem to indicate he will reject Horizon's proposal for a consumer-funded levy to support new nuclear builds, such as in Wylfa. Horizon's position is that modern nuclear power stations are far more expensive to build than conventional coal and gas-fired stations and therefore need some financial support (such as a consumer-funded levy) in order to make the business case viable.

Mr Huhne is reported to have said that he thought the industry had converged on the view “that the carbon price floor will be enough” to make new nuclear plans viable economically. Setting a carbon price floor would essentially make cheaper but higher polluting energy (i.e. that made from coal and gas) more expensive, thus making expensive but cleaner nuclear energy more competitive. The current price of a tonne of carbon allowances is around €13, whereas nuclear competitor EDF, the French state controlled giant, believes that carbon price floor of around €50 per tonne would be sufficient to make nuclear energy competitive. Mr Huhne appears to agree with EDF, thus allowing him to keep to coalition policy of promoting new nuclear power stations as long as they do not require public subsidy. Setting a floor price for carbon would not be a hidden subsidy to nuclear energy alone as it would also make expensive renewable energy technologies more competitive. Of course, the end result is that we all end up having to pay more for our energy... (and we should not forget that it was carbon-trading schemes like this which were one of the largest contributing factors towards the closure of Anglesey Aluminium by making its operation economically unviable inside the EU).

Personally I find Horizon's stance a little surprising as a "consumer-funded levy" is essentially a subsidy by another name -- whereas it has long been known that the long-standing policy position of both the Labour and Conservative parties on new nuclear builds has been to reject the need for any further subsidies to the nuclear industry. Therefore to be fair to Huhne he simply appears to be adhering to this long standing cross-party stance and official coalition policy. As far as I can see, the fuss seems to be more related to competition between German-owned Horizon and French-owned EDF. EDF currently owns a fleet of eight UK nuclear power stations and the setting of a carbon price floor would boost the profitability of these existing stations whilst at the same time making new nuclear builds, such as Horizon plans at Wylfa, less profitable in comparison because of the estimated approx £7bn construction costs.

Anyway, this all goes to show that Wylfa B is by no means a certainty yet.

UPDATE: I thank learned commentators for alerting me to it, but its seems that the German government has announced plans to impose a tax on nuclear fuel rods from 2011 onwards which will have a large impact on German nuclear utility firms, such as E.On and RWE npower. According to reports by the Wall Street Journal, this could see E.On's after tax profits reduced by up to €1bn every year for the next six years. Chris Huhne's remarks therefore represent a substantial double-whammy to Horizon's owners, E.On and RWE npower and again show just how incredibly precarious the proposed £7bn investment in Wylfa B actually is.

UPDATE 2: Interestingly it appears that the Council has arranged an open seminar with Horizon and Centrica on Friday this week for Anglesey businesses to learn how they could benefit from the Energy Island project. From the Council website:

This special event - to be held at Cartio Môn, Bodedern, between 8.30am and 1.00pm - will conclude Anglesey's first ever Business Week. (At junction 4, off the A55).

Energy Island Programme Director, Sasha Wynn Davies, explained, "Friday's event will give businesses a unique opportunity to actively engage with both companies as well as gain a greater understanding of the business opportunities associated with the Energy Island programme."

"The event will also be used to raise awareness of existing Nuclear / Decommissioning supply chain opportunities and the proposed off shore wind Centrica development. Local businesses and companies present will have an opportunity to ask questions about these developments and the wider Energy Island Programme."

If you would like to attend the event, please contact Energy Island Programme Coordinator, Linda Wyn Jones, on (01248) 752462 or e-mail: lwjpl@anglesey.gov.uk"

Did anybody else know this week is Anglesey Business Week? No? Me neither...

Tuesday, 21 September 2010

Welsh Lib Dem leader, Kirsty Williams, in her speech to conference yesterday contrasted the Coalition government's record on green policies with that of the Welsh Assembly:

Well, [WAG's] biggest achievement is the creation of Wales‘ very own internal air link. You think domestic flights from Manchester to London are a scandal? Try Anglesey to Cardiff !

The minister presiding over this scandal is Plaid Cymru’s leader, and Deputy First Minister, Ieuan Wyn Jones. His commute? That’s right: Anglesey to Cardiff !

No wonder they call it Ieuan Air.

3.2 million pounds of our money pumped into an air link which has in turn pumped thousands of tonnes of C02 into the atmosphere at a cost to the taxpayer of £84 for each and every trip.

And you know, whilst Ministers fly between Cardiff and Anglesey. The empty ministerial limo still makes the trip to drop of the ministerial boxes.

As Wales currently lacks any significant road or rail transport infrastructure linking North, Mid and South Wales, I personally am in favour of the air link -- however, I do oppose the size of the subsidy. Some justify it by saying that the £800,000 per annum cost of the air link is minuscule compared to the cost of building a rail or motorway along the length of Wales, however this is I believe a bogus argument.

The fact is that subsidies distort the market and create perverse incentives. As things stand there is currently no incentive for any firm to attempt to fly between Anglesey and Cardiff without demanding financial support from the Welsh Assembly -- and far more importantly there is no incentive for any operator to consider offering flights from Anglesey to any other airports in the UK as they will not attract a subsidy and will therefore by definition be less profitable. In my view Ynys Môn (and by extension the whole of North Wales) would benefit far more from regular (even bi-weekly) flights between Anglesey and London, than it does from flights between here and Cardiff -- however the sheer scale of the subsidy available for linking Anglesey and Cardiff makes any other routes far less likely.

Last week there was a small discussion below this thread regarding internet and broadband provision on Anglesey and whether it was sufficient. In response the people from Inventorium have alerted me to a free seminar they will be holding in Menai Bridge on Thursday (23 September) regarding visualising how life will be like in Anglesey in ten years time -- particularly relating to the question "will an investment in wireless broadband accessible in in every village make a difference"? An interesting question.

The event will be held from 13:00-17:00 in the Victoria Hotel and people interested are requested to register by emailing events@inventorium.org or calling 01248 675013. The flier is below.Inventorium Anglesey Business Week

Sunday, 19 September 2010

Last week I wrote about how the North Wales Police Authority had pleaded in Wednesday's Holyhead & Anglesey Mail for everyone to take part in an online survey on elected Police Commissioners. By Thursday - the very next day - this self same survey was 'closed'.

In yesterday's Daily Post, North Wales Police Authority's vice chair, Douglas Wynne reappeared -- this time to tell us the 'interim' results of the survey. Yes, the 'interim' results of the survey we had one day to take part in. Anyway, here is the Daily Post headline:

And just incase you had still failed to get the impression that the survey results found against the idea of an elected Police Commissioner, the Daily Post even helpfully included a sub-headline:

The article itself then begins like this:

"OPPOSITION is growing to the idea of having an elected commissioner in charge of police in North Wales. The interim results of a survey show a majority of people are against the proposal which is part of a package of reforms being put forward by the Government"

It goes on to give the results of the survey:

"Of those who responded, 41% were opposed to a commissioner while less than 30% were in favour."

Happily, the NWPA have published (pdf) the full results of the survey on their website so I went to have a look. Here are the actual results to the crucial question, "Overall, are you in favour of a directly elected Police and Crime Commissioner?":

So, yes, just 29% of respondents declared themselves to be in 'favour' and 41% of respondents did indeed oppose the proposal. But hold on a moment: whats that big pink wedge in the top left? Oh, thats the percentage of respondents who said they were 'somewhat in favour' of an elected police commissioner... which by my reckoning means that actually 45% (29% + 16%) of respondents are either 'in favour' or 'somewhat in favour' of elected police commissioners. In other words, in direct contradiction to the spin put on the results by both NWPA Vice Chair Douglas Wynne and the apocalyptic Daily Post headlines, those favouring elected police chiefs outnumber those opposed by four percentage points.

So, what about that dire warning at the beginning of the Daily Post article which told us ominously that "OPPOSITION is growing to the idea of having an elected commissioner in charge of police in North Wales"? Just how many people from North Wales actually took part in the survey? According to the published results just 82 respondents were from North Wales... To call this shoddy reporting doesn't even begin to do it justice. Outright lies is a more apposite.

Elsewhere in the article, NWPA's Douglas Wynne goes on to say that in addition to the (fake) public opposition, "we are also worried we could end up with a police commissioner from an extremist party or single issue pressure group". Well, let me put his mind at rest -- below is the Druid voting intention poll aggregator for North Wales:

As you can see, "others" which includes UKIP, Greens, BNP, Communist, Socialist and Christian parties rarely polls above five per cent in North Wales -- within that, the BNP (because they are surely the 'extremists' Wynne is talking about), have never polled above two percent. The very idea that a representative of any of those parties would be elected as Police Commissioner in North Wales is pure fantasy. In fact, I would say it is a slur on North Wales residents to even raise this as a concern.

So, to conclude, the non-elected NWPA vice chair has basically (a) wilfully distorted and misrepresented the actual results of a survey which anyway had a minuscule number of respondents from North Wales; and (b) stated that he doesn't trust North Wales residents not to elect a BNP police commissioner. In so doing he has given me the clearest reason yet why the NWPA should be abolished and replaced by a directly elected Police Commissioner.

Incidentally, I note that the survey is now up and running again and I therefore urge you to take part and let the NWPA know what you really think. You can take the survey here.

Thursday, 16 September 2010

The Druid has long argued (most recently here) that the most effective way of promoting economic growth in Anglesey and in Wales as a whole would be to strategically reduce the rate of corporation tax levied here. I am delighted therefore to read an interview in today's Western Mail with the Welsh Conservative AM, David Melding, where he advocates exactly the same policy:

“What I would suggest is that if Wales really wants to be enterprising and attract investors who want to stay here ... the best thing we could do is lower the level of corporation tax, the tax that companies have to pay, but perhaps look at something quite radical like the top rate of income tax and lowering that, so that people who are higher earners – and there aren’t many in Wales – come to Wales and start up businesses, and because they do that they are able to retain more of the wealth they are generating.

“I really think that is the only way to tackle the long-term economic poverty that we have in Wales, compared to many other regions in Britain. We’ve really got to have a tax policy in Wales that’s a bit different to that in the south east of England or London.”

For too long successive governments have tried to counterbalance the concentration of private businesses in the South East of England (where they have access to the largest market, complementary service companies, and easy international links, etc) through the apparatus of the state. Regional Development Agencies, staffed by hundreds of bureaucrats, have sought to tempt businesses to set up in their localities through the blunt instruments of offering non-repayable grants or tax holidays. This strategy has been flawed from the outset for two reasons:

The Agencies have attempted to "pick winners", i.e. select which firms they believe should succeed and then showered them with grants. First of all, as any honest stockbroker will tell you, picking winners is a very, very difficult game. Secondly, this process has been 'self selecting' insomuch that only those companies which are aware of the opportunities have applied for assistance -- in many cases multiple times once they have figured out how to play the system.

These regional agencies have not been able to bring about any meaningful change in the business environment in their regions, meaning that when the grants run out or the tax holiday ends, the original reason why those companies set up in that region in the first place is removed. Then, like the experience with many multinationals in South Wales, they then shift their manufacturing to lower cost countries.

My point is that in order to generate sustainable economic growth in Wales, it is necessary to create a business environment which has an in-built competitive advantage over other regions, and were that advantage is available to all companies -- not just the ones favoured by a few bureaucrats. A reduced rate of Corporation Tax in Wales would deliver this and I am delighted to see that David Melding AM seems to get it. However, that said, so far the Welsh Assembly has completely failed to create a competitive advantage for Welsh businesses. The only economic lever which the Assembly has full control over is the setting of Business Rates (a devolved matter) and yet as I pointed out the other day, Business Rates in Wales are the highest in the United Kingdom.We need more radical thinking in the Welsh Assembly along the lines which David Melding is suggesting.

I have to admit to a feeling of deep unease over the announcement that 200 staff at the Vion ("Chuckies") chicken processing plant in Llangefni will start a five day strike from next Monday. The strike is in protest at Vion's offer of a 2% wage rise -- the Unite union argued that this is unacceptable considering that inflation is currently running at 3.1%.

The Llangefni plant is operated by the Dutch owned Vion Food Group, which produces and processes beef, lamb, pork bacon and chicken, as well as products such as sausages and cooked meats. The company employs 350 workers in its Llangefni chicken plant and a further 240 at the Welsh Country Foods abattoir in Gaerwen -- as such Vion is one of Anglesey's largest employers. Over the past year, Vion has already shed 140 jobs in the Llangefni plant when it moved to just one shift, and a further 200 jobs were lost at Welsh Country Foods in Gaerwen when the company shifted its retail packaging operation to Winsford in Cheshire.

The newspaper report in today's Holyhead & Anglesey Mail makes no reference to a vote having been held or the margin by which such a vote was won. As the plant employs 350 people, yet only 200 are striking, it suggests that the decision to strike is by no means unanimous amongst all workers at the plant.

Although I recognise that the pay rise is below inflation, one would hope that opting to strike would be very much the last resort -- especially as a five day strike seems to be extraordinarily prolonged in this day and age. This is particularly so when you consider that currently only 15% of private sector workers are unionised, and if we knock out those ex-public sector areas such as utilities, the railways and British Airways, the private sector rate falls to well below 10%. Also with Vion's profit margin running at just 0.7% of turnover according to their 2009 Annual Report (Dutch), it doesn't seem that Vion is currently making vast profits either.

My fear is that industrial action on this scale in a private business, possibly promoted by the Unite union not only for the merits of this particular case, could have damaging implications on Vion's future presence on Anglesey. This fear is compounded by the quote in the H&A Mail by a Vion spokesman, who said ominously, "the business will continue to focus on providing uninterrupted supply to its customers". How difficult would it be for Vion to shift production to another plant -- without a unionised workforce? What knock-on effects will a strike by the Llangefni plant have on the prospects of the Gaerwen plant? I hope that all of these questions have been considered soberly and carefully by both Unite and the workers involved before opting to strike.

Tuesday, 14 September 2010

In an update to my earlier post, I'm happy to report that the Full Council today voted to support the opening of the Anglesey Central Railway a.k.a. Lein Amlwch.

Only one councillor voted against the decision: Plaid Cymru's Fflur Mai Hughes, who ironically represents the Cefni ward in Llangefni -- one of the places most likely to benefit from the possible construction jobs and improved transport links which the reopened Amlwch Line could bring. One has to wonder whether she bothered to canvass anybody in her ward before voting "no"?

Anyway, I'm sure she will now explain to the residents and businesses in Llangefni why she thinks Llangefni doesn't need the economic boost which the reopening of the Central Anglesey Line would bring. Cllr Hughes was elected by a margin of just 2 votes in the last council elections -- she may find that Cefni residents will decide to dispense with her services in 2012.

The Anglesey Central Railway (Lein Amlwch in Welsh) which connects the port of Amlwch via Llangefni to the North Wales Coast Line at Gaerwen has been defunct as a passenger service since 1964 -- though freight services continued up until 1993 to serve Octel.

Supporters have been campaigning for years for the line to be restored and, with the possibility of Wylfa B on the horizon, these calls have recently carried an additional impetus. Consequently Anglesey County Council will be debating issues relating to the possible reopening of the line this afternoon at 2pm. All supporters of Anglesey Central Railway are asked to attend the Council Chamber in Llangefni to show support.

Monday, 13 September 2010

According to Ynysmon.com Anglesey Council Interim MD, David Bowles, may be in breach of his contract as he is reportedly refusing to meet with members of the public -- instead referring them directly to various corporate heads within the Council instead.

Meeting with concerned members of the public is an important role of any council chief -- and considering Mr Bowles is costing £270,000 per annum, it seems that we could be getting shortchanged.

Since setting up The Druid perhaps one topic more than any other has regularly generated substantial controversy and comment: planning decisions. Many a commenter has levelled complaints against Anglesey County Council and its Planning & Orders Committee for perceived bad decisions, alleged injustices, and sometimes even more serious transgressions.

But just how justified are these comments and allegations? Is it a case of lay people not understanding how the system works, with its complex laws, policies and procedures, and jumping to the wrong conclusions?

Perhaps, or perhaps not.

Much conjecture, and much speculation is posted, but not often anything which could be actioned in law. Most (but not all) commenters admit to not knowing much about planning law and many seem to need advice and a guiding hand through its maze of procedure.

Such advice is available of course in the market -- but at a cost. The objector to a planning application can range from a single person, say an affected neighbour, to a number of people, say a community group. The issues are often the same.

The Druid has discrete access to specialist legal advice on planning practice, planning law, policy and procedure and propose that it may be helpful to set up a dedicated page on this blog where questions may be posted, matters may be explored and many complex issues may be explained discreetly, without divulging names or addresses. Lets call them hypothetical scenarios?

So my question to you all is this: do you think there is any merit in the Druid setting up some kind of Q&A page dedicated to planning matters where my specialist will try and answer questions? If so, we could keep it open for as long as it is needed, or until the subject exhausts itself.

And to to kick off the discussion here is a second question for you all: are we all NIMBYs? Are we all obsessed with preserving our immediate orbit and environment?Note on comments: All normal rules apply - please don't post any specific allegations against named organisations or persons.

Saturday, 11 September 2010

In a remarkable snub to their leader, Ieuan Wyn Jones, delegates at the Plaid Cymru conference yesterday voted decisively against subsidies for the North-South air link between Anglesey and Cardiff (a.k.a. IeuanAir). Now I'm not a particular supporter of subsidies myself, but surely its extraordinary that IWJ is unable to even get his own party to support one of his flagship policies?

Or is it..? The truth is that this is yet another policy issue where Ieuan Wyn Jones has been unable to lead his party to the direct detriment of the constituency he represents:

Despite Ieuan Wyn Jones apparently being in favour of nuclear power (in Anglesey anyway), Plaid Cymru is steadfastly against any nuclear installations in Wales.

Despite RAF Valley being one of the last remaining large employers on Anglesey, Ieuan Wyn Jones declined to slap down or even respond to Plaid MP Elfyn Llwyd's calls to ban the RAF from conducting low-flying training in Snowdonia -- the very raison d'etre of RAF Valley.

Has there ever been such a weak party leader?

Furthermore, in his speech to conference yesterday, Ieuan Wyn Jones made the following bold claims:

"Managing Wales may be what other parties are about, but for Plaid putting up with things as they are, just doesn't feel right ... I didn't come into politics to manage Wales. I came into politics because I wanted to change Wales, and change Wales for the better"

Its just as well he doesn't want to "manage" Wales because, as we have just seen, he can't even effectively manage his own party.

Secondly, with regards to Ieuan's claim to want "to change Wales, and change Wales for the better", I invite all readers to examine his record here on Anglesey - a constituency he has represented as either MP or AM for the past 25 years:

Anglesey is the poorest sub-region in the United Kingdom with the lowest Gross Value Added (GVA) per head in the United Kingdom. At £10,998 per head, Anglesey’s GVA is just 55.1 per cent of the UK’s average. When you are officially the poorest place in the UK things by definition can't have been any worse - or at least have not improved under 25 years of IWJ.

Anglesey is poorer than some of the poorest parts of rural Poland according to the 2009 OECD Factbook.

Data for full-time employees show that average earnings in Anglesey were approx. £396 per week in 2007, compared with £415 per week in Wales and £456 per week in the UK. It should be noted that gross average earnings on the Island were distorted by wages paid to employees at Wylfa and Anglesey Aluminium, which are substantially higher than other wages in the area.

However we don't have to worry about Anglesey Aluminium distorting average earnings on the Island anymore because it was forced to close in 2009 wiping out at least 450 direct jobs and an estimated further 240 jobs through indirect and induced effects.

In addition Anglesey has also lost Octel in Amlwch, Eaton Electric in Holyhead (240 jobs), Peboc in Llangefni (100 jobs), Menai Electrical in Gaerwen (50 jobs), Readileads (35 jobs) and Vion/Welsh Country Foods has restructured in Llangefni and Gaerwen (191 jobs). These are on top of the countless other jobs lost at small businesses throughout the Island which aren’t reported in the local press.

In fact, according to research by the University of Wales, since 2001 there has been a decrease of 2,100 jobs in private sector employment on Anglesey and the proportion of those employed in the private sector has decreased from 74 per cent to 67 per cent.

Anglesey is currently suffering from an employment ‘triple whammy’, with the lowest level of employment coupled with the highest rates of job-seekers claimants and economic inactivity in North Wales.

Remarkably farming in North Wales has fared even worse than business. During the period 1997 to 2007, the economic contribution of agriculture to the North Wales and Anglesey economy fell by a staggering 67 per cent compared to an overall UK decline of just 7 per cent.

On top of all this, Anglesey County Council is poorly managed, riven with infighting, and planning on raising Council Tax by 15% over three years.

Now you may say that it is unfair to blame IWJ for all of this - and you'd be right. As Anglesey residents, the best we can say for him is that he has made exactly zero difference whatsoever to the constituency he has represented for the past quarter of a century. "Putting up with things as they are" is actually exactly what he has done here on Ynys Môn -- hardly a record to inspire confidence in his ability to transform Wales for the better.